A snapshot of the current daily technicals…
A lot has changed since last week’s ETF update. One notable exception is the first item…
Precious Metals
GLD turned down at resistance but has held support during a difficult (is there any other kind when FOMC meets?) week so far.
SLV has critical support as noted; the intersection of the lateral and trend lines.
SLV vs. GLD hit critical support yesterday. Silver would preferably lead a precious metals rally. It would also be key to any coming bounce potential in commodities and the ‘inflation trade’.
GDX is indeed on the “Bottom Retest Express” (BRE) as we called it in a recent NFTRH or interim update. A hold and bounce here could be the prelude to a very good rally. A failure? Not so much.
GDX-GLD has flat out failed to provide a positive indication. It flirted with a breakdown last week and is now testing the low of 1.5 months ago.
SIL is likewise on the ‘BRE’.
GLD-DBC continues to support the big picture theme of global economic contraction.
GLD-USO continues to be a friendly gold mining indicator.
GLD-SPY continues to be stable during FOMC week. This stability is a positive divergence to the gold mining sector. Let’s see if it holds up post FOMC.
Commodities
DBC is deeply over sold, very bearish and prone to get a counter trend bounce in the coming weeks.
DBB is very bearish. Base metals are an extreme avoid by this chart.
PALL failed to break out. Bearish.
COPX is very bearish but getting very over sold.
DBA is at critical support.
USO is deeply over sold but made a high volume reversal yesterday. Keep an eye on crude oil for sector indications. It has been the star performer in the Commodity Puke Sweepstakes and is the most heavily watched by basically everybody.
UNG is bearish.
URA is making an important retest of lows that came prior to the big bounce on the Japan nuke restart news. If you’re a U bull, you are buying and then using just below 11 as a stop loss. If you are a U bull.
Bonds
TLT is making new highs as it takes risk ‘OFF’ money in. Junk bonds continue to indicate risk is ‘OFF’ after having negatively diverged the US stock market for so long.
TIP-TLT continues to indicate that the Treasury market perceives no inflation issues whatsoever. Indeed, the whole world is worried about anything other than inflation right now. Precisely the reason we should be on watch for a coming counter-trend bounce at least.
Stock Markets
SPY is at support here and now. There are gaps down below, but bears might consider an over sold condition (RSI is at levels that limited the July and October declines) during FOMC week just before the traditional Santa rally week.
QQQ is piercing the support zone and nearly as over sold as in October by RSI.
IWM looks more bearish, with a measured target to 111. This is curious, considering that Small Cap season is upcoming in January. The target is the target; as long as IWM remains 115, 111 is the measurement.
SMH is not at all damaged. Supports 1 and 2 are noted, with key ‘long-term breakout’ support down at 44.
XLE is now incorporated given the weekly view we reviewed in NFTRH 321 showing long-term support. Resistance is noted.
EWC is dealing with short-term resistance. As energy goes, so too will Canada likely go in the near term.
EZU took a lot of damage in the last week and is just plain bearish if it remains below lateral and trend line resistance.
EWG is a little better. It makes sense, since Germany is a little better than the average European economy.
EWP had made a higher high as Europe tried to inspire its casino patrons. This failed and a lower low got put in to that little bounce. Bearish.
EEM is just awful, also getting over sold.
FXI is more bearish than bullish at this time.
DXJ is losing support, with a big fat (BoJ) gap to be filled. This is what can happen to casino patrons who buy in to this policy stuff.
Currency
UUP lost initial support with the next level to watch at the SMA 50.
FXE needs to get above the SMA 50 to turn its bounce (off of positive MACD and RSI divergence) into a rally.
FXC remains very bearish, but recall that our downside measurement on the Canada dollar is 85. It does not mean it needs to stop dropping there, but it does have us on watch for any positive indications for a future commodities bounce.
FXY continues to bounce. BoJ be damned. It appears the Yen is at the center of global stock market problems of late. I cannot decode the ways in which hedge funds and black boxes play their short Yen, long stocks strategies, but it appears that an unwind of some degree has been at play over the last week.
Bottom Line
Precious Metals: Gold is out performing during global liquidity strife. Global asset markets (incl. the precious metals) would probably like to see silver find support relative to gold. Meanwhile, it is now or never for silver, gold and silver stocks to make a double bottom or successful bottom retest.
Commodities: It has been interesting to see some other asset class than the precious metals assume the star bearish headlines. This has (positive) significance to our big picture macro theme of global economic contraction. Deeply over sold, prone to bounce and flat out bearish.
Bonds: Implying a risk ‘OFF’ atmosphere currently.
US Stock Markets: US is on a thus far routine correction and at or approaching support levels. With the now long-term divergence by Junk to Quality bond spreads, I am inclined to give a nod to the idea that stocks may have topped… as in for good. But a seasonal bounce can come at any time and we will need to watch economic data going forward (next key is the Semiconductor Equipment book-to-bill) and of course consider whatever comes out of the FOMC’s collective orifice today.
Global Stock Markets: Bearish by daily charts.
Currencies: USD can continue to correct and Euro can continue to pop near term. Bigger picture, USD is still expected to rise, Euro drop. Commodity currencies are bearish but nearing downside targets. Yen is bouncing in the face of the BoJ.
